OMAHA, Neb. (AP) — Berkshire Hathaway’s Class A stock has fallen below $100,000 for the first time since January 2010 amid broader market declines and concern about the health of the economy.
The Class A shares of billionaire investor Warren Buffett’s company declined $2,136, or 2.1 percent, to $99,114 Thursday afternoon. The more affordable Class B shares fell at a similar rate, 2.3 percent, or $1.53, to $65.69. The Standard & Poor’s 500 index was down 4.1 percent late Thursday.
Over the past year, Berkshire’s Class A shares declined nearly 19 percent from $124,865 to Wednesday’s closing price of $101,250. By contrast, the S&P 500 index that Buffett measures his company’s progress against was up about 2 percent from a year earlier at Wednesday’s close.
Berkshire’s Class A stock remains the most expensive U.S. stock, but it has been gradually declining since February when it was trading above $131,000 before several major disasters generated losses for Berkshire’s insurance units.
Berkshire recorded $1.7 billion in insurance losses related to the March 11 earthquake and tsunami in Japan, the Feb. 22 New Zealand earthquake and flooding in Australia.
Some investors also remain concerned about the plan to eventually replace the 81-year-old Buffett at the helm of the Omaha company. Buffett has revealed who will likely handle Berkshire’s investments after he is gone — but not who will be the next CEO.
Berkshire has said the board has a list of four internal candidates to replace Buffett as chief executive, but Buffett has always refused to name them.
Fans of Berkshire say the stock appears to be something of a bargain because the value of the company’s holdings has continued to grow while the stock price has declined. Glenn Tongue and Whitney Tilson told investors at their T2Partners investment firm that they added to their Berkshire holdings in August because of the opportunity.
For example, Berkshire completed its $9 billion acquisition of specialty chemical maker Lubrizol last week, but Berkshire’s stock price didn’t rise to reflect the fact that the conglomerate added another subsidiary.
Berkshire’s stock is trading well below its all-time high of $151,650, reached in December 2007. But that came before the financial turmoil of 2008 and just after an exceptionally profitable quarter that was helped by a $2 billion investment gain.
When Buffett’s investment partnership first bought Berkshire stock in 1962, the shares sold for $7 and $8 apiece. At that time, Berkshire was a New England textile firm. After 1969, Berkshire became Buffett’s investment vehicle.
Today, Berkshire owns roughly 80 subsidiaries, including clothing, furniture and jewelry firms, but its insurance and utility businesses typically account for more than half of the company’s net income. It has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.
Berkshire Hathaway Inc.: www.berkshirehathaway.com